C&I Customers File FERC Complaint About AEP Ohio Transmission Charges

Industrial Energy Users-Ohio – a group of Buckeye State energy consumers that spend over $3 billion per year collectively on electricity and natural gas for their plants and facilities – filed a complaint (Docket No. EL16-10-000) at the Federal Energy Regulatory Commission (FERC) on November 6 alleging that AEP-Ohio had flouted the PJM Open Access Transmission Tariff (OATT) with the full knowledge of PJM Interconnection, “and that such actions are unjust, unreasonable, and unduly discriminatory, in violation of the Federal Power Act.”

The PJM Open Access Transmission Tariff is the overall document that governs the operations of PJM. The tariff includes the provisions governing transmission service within the PJM region and it is is subject to acceptance by FERC, the agency that regulates PJM and the other regional grid organizations. The IEU-Ohio members claim they are being overcharged by more than $1 million annually on their collective transmission bills.

The electric utility, AEP Ohio, serves about 1.5 million customers statewide – 175,000 of them, commercial; and 10, 098, industrial. The complaint alleges that, “AEP-Ohio has taken and continues to take unlawful and unreasonable actions that directly and materially interfere with Ohio retail customers’ ability to take transmission service directly or through an intermediary at the rates, terms, and conditions set forth in the PJM Open Access Transmission Tariff as required by Order No. 888 [regarding open access non-discriminatory transmission services by public utilities].”

Furthermore, IEU-Ohio alleges that “PJM, which has responsibility for administering the PJM OATT, has not taken actions to prevent AEP-Ohio’s unlawful and unreasonable actions.”

Under the requirements of Order No. 888, and as reflected in the provisions of the PJM OATT, “transmission service must be made available to ‘eligible customers’ under the rates, terms, and conditions set forth in the OATT.” Such eligible customers are to include retail customers that are taking, or are qualified to take, unbundled retail service.

However, the advocacy group states, “AEP-Ohio … has denied retail customers the opportunity to secure transmission services under the PJM OATT. Beginning June 1, 2015, AEP-Ohio has resold, billed for, and collected for certain PJM transmission services, including Network Integration Transmission Service (NITS), through a non-bypassable transmission rider, the Basic Transmission Cost Recovery Rider (BTCR), which has been approved by the Public Utilities Commission of Ohio.”

Indeed, “Retail customers are functionally barred by AEP-Ohio from securing these transmission services directly from PJM or indirectly through a competitive retail electric service (CRES) provider,” IEU-Ohio said

“Further, … AEP-Ohio resells, bills, and collects for NITS (and other transmission services) based on the higher of the retail customer’s monthly demand or a minimum billing demand …, rather than the [one Coincident Peak that is commonly used for transmission billing]”. .

As a result of AEP-Ohio’s application of a different billing determinant, billings for transmission service “have been and will continue to be substantially higher for IEU-Ohio members than what would be billed under the PJM OATT. IEU-Ohio members estimate that their collective transmission bills from AEP-Ohio will be at least $1.307 million more annually under the BTCR than if those customers obtained transmission services at the rates, terms, and conditions set forth in the PJM OATT,” IEU-Ohio said

IEU-Ohio is now seeking relief through a FERC decision that the BTCR is illegitimate; that customers may acquire transmission service directly from PJM at the rates, terms, and conditions set forth in the PJM OATT; and that refunds be granted.

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